Diamonds and Dogs

2/14/19

Cisco Systems (CSCO) breaking out to new highs. The networking-equipment giant is up 3% to highs not seen since the 2000 tech bubble following better than expected earnings. Cisco beat by a penny as revenues rose 4.7% to $12.45 billion. Cisco also raised guidance and increased the dividend by 6%. The stock now yields 2.8%. Cisco also increased their stock repurchase program by $15 billion. Several upgrades for the stock with price targets of $56, $55 and $62 a share. With 5G coming out later this year, it looks like Cisco is firing on all cylinders once again.  

No fizzle at Coke (KO). Coca-Cola is down 7% to a four month low following earnings. Earnings were in-line, but sales fell 5.5% to $7.1 billion, missing estimates. Going forward, Coke is expected to face some headwinds with slower growth. The economy a little softer than last year, more volatile and uncertain, especially in Argentina, Turkey, the Middle East and Europe. Coke bought back a little stock to offset compensation dilution. The dividend remains key priority along with M&A. As one analyst put it, with a muted outlook and no M&A catalyst, the stock is expected to underperform.